during january 2006 vail co made long term improvements to a recently leased buildin 604603
During January 2006, Vail Co. made long-term improvements to a recently leased building. The lease agreement provides for neither a transfer of title to Vail nor a bargain purchase option. The present value of the minimum lease payments equals 85% of the building’s market value, and the lease term equals 70% of the building’s economic life. Should assets be recognized for the building and the leasehold improvements?
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Building |
Leasehold improvements |
|
a. |
Yes |
Yes |
b. |
No |
Yes |
c. |
Yes |
No |
d. |
No |
No |